Qualcomm stock slips amid likely job cuts in slowing smartphone market

Chip major Qualcomm's shares fell about 7 per cent after it provided a gloomy outlook for its fiscal Q4

San Francisco: Chip major Qualcomm’s shares fell about 7 per cent after it provided a gloomy outlook for its fiscal Q4, warning of an ongoing slump in smartphone sales and likely job cuts.

In a US securities filing as it announced results for its fiscal third quarter ended June 25, the company said “while we are in the process of developing our plans, we currently expect these actions to consist largely of workforce reductions, and in connection with any such actions we would expect to incur significant additional restructuring charge”.

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In the earnings call, President and CEO Cristiano Amon said that they are taking a conservative view of the market and “will be proactively taking additional cost actions to ensure Qualcomm is well positioned to deliver maximum value for stockholders in an uncertain environment”.

The company delivered revenues of $8.4 billion, a 23 per cent year-over-year drop and 52 per cent decrease in net income to $1.8 billion, mainly due to an ongoing slump in the smartphone industry. In India, the smartphone market shipped 64 million units in the first half this year with a decline of 10 per cent, according to the International Data Corporation (IDC).

“We are pleased with our technology leadership, product roadmap and design-win execution, which position us well for growth and diversification in the long term,” Amon said in a statement. “As AI use cases proliferate to the edge, on-device AI has the potential to drive an inflection point across all our products. Qualcomm remains best positioned to lead this transition given the unmatched accelerated computing performance with the power efficiency of our platforms,” Amon added.